What are risk measures in mutual funds?
What are risk measures in mutual funds?
There are five main indicators of investment risk that apply to the analysis of stocks, bonds, and mutual fund portfolios. They are alpha, beta, r-squared, standard deviation, and the Sharpe ratio.
How do you determine the risk factor of a mutual fund?
6 Ways To Measure Risk In Mutual Funds
- Beta.
- Alpha.
- R Squared.
- Standard Deviation.
- Sharpe Ratio.
- Sortino Ratio.
What are the types of risk in mutual funds?
Risks in Mutual Funds and Suitable Solutions
| Types of Risks | Mitigation Tip |
|---|---|
| Volatility risk | Selecting a diversified portfolio comprising funds schemes with low to moderate risks will help tackle market volatility. |
| Credit risk | Invest in high credit-rated securities with a track of paying substantial and timely interest. |
How do you assess mutual fund performance?
5 keys to evaluate performance of your Mutual Funds
- Risk adjusted returns. Risk adjusted returns are the calculative returns your funds make compared to the risk indicated over the period of time.
- Benchmark.
- Relative Performance with peers.
- Quality of stocks in the portfolio.
- Track record and competence of the fund manager.
What is a good risk grade?
Understanding RiskGrades (RG) The RG of a low-risk asset is expected to be zero to 100. Normal stocks/indexes should have an RG of 100 to 300. Stocks with an RG of 100 to 800 are considered high risk. IPOs have an RG greater than 800.
What are two risks of mutual funds?
4 Types of Mutual Funds Risk Associated with Mutual Funds
- Equity or Stock Market Risk. The money invested by you in an equity mutual fund is ultimately invested in the stocks of companies listed on the stock market.
- Credit Risk. This risk is faced by all Debt Fund investors.
- Interest Rate Risk.
- Inflation Risk.
What are the risks of managed funds?
These include currency risk, gearing risk, short-selling risk and emerging market risk. While investing in managed funds provides access to different asset classes and industry sectors, there is always a risk that the managed fund investments may underperform or decline in value. This will affect your return.
